October NY world sugar #11 (SBV26) surged +0.88 cents, or +5.65%, on Friday, while October London ICE white sugar #5 (SWV26) climbed +16.50, or +3.39%.
NY sugar reached a 10-month nearest-futures high on Friday, while London sugar posted an 11-month high as global supply concerns intensified.
EU and UK sugar production is forecast to fall to 14.98 million metric tons this year, the lowest level in 11 years, according to data from S&P Global Energy.
Drought and hot weather across Europe are being cited as the primary drivers behind the sharp decline in regional output.
Brazil, the world’s largest sugar-producing country, added further pressure after Unica reported that Brazil Center-South June sugar production fell -26.3% year-on-year to 3.903 MMT.
Sugar trader Czarnikow cut its global 2026/27 sugar balance estimate from a surplus of 1.4 MMT to a deficit of -100,000 MT on June 11, citing Brazil’s sugar mills shifting toward ethanol production amid the surge in crude oil prices from the US-Iran war.
Covrig Analytics now expects a global sugar deficit in 2026/27 of -300,000 MT, a sharp reversal from its June forecast for a +100,000 MT surplus.
Green Pool Commodity Specialists raised their global 2026/27 sugar deficit estimate to -3.3 MMT from a June figure of -1.76 MMT, while StoneX raised its 2026/27 global deficit forecast to -1.7 MMT from a May estimate of -550,000 MT.
India, the second-largest sugar-producing country in the world, faces mounting crop risks after India’s Meteorological Department warned that monsoon rainfall during August and September “will likely be below normal.”
India’s Earth Science Ministry has warned that this year’s monsoon could be the weakest in 11 years, with cumulative monsoon rainfall running 11% below normal as of August 7.
The potential emergence of a strong El Niño event is amplifying concerns, with the US Climate Prediction Center on July 8 stating the pattern will likely be one of the strongest in more than 75 years.
El Niño conditions are expected to curb rainfall across Brazil, India, and Thailand, the three largest sugar-producing regions in the world.
The International Sugar Organization (ISO) forecast global 2025/26 sugar production at a record 182 MMT, up +3.5% year-on-year, with a surplus estimate of 2.2 MMT, rebounding from a -3.46 MMT deficit in 2024/25.
For 2026/27, ISO forecasts global sugar production will fall by -1.15% year-on-year to 180 MMT, with a global deficit of -262,000 MT, citing El Niño risks in India and Thailand.
The USDA projected that global 2026/27 sugar production would fall 6.5% year-on-year to 184.854 MMT, down from a record 186.056 MMT in 2025/26.
The USDA’s Foreign Agricultural Service predicted Brazil’s 2026/27 sugar output would decline -3.0% year-on-year to 42.5 MMT, while Thailand’s production is expected to fall -15.6% year-on-year to 9.5 MMT.
FAS projected India’s 2026/27 sugar production would rise +12% year-on-year to 33.6 MMT, driven by favorable monsoon rains and increased sugar acreage, should conditions improve.
Conab, in its April 28 initial report for the new sugar season, forecast 2026/27 Brazilian sugar output will decline -0.5% to 43.952 MMT, while ethanol output climbs +7.2% year-on-year to 29.259 million liters.
The confluence of supply-side risks across multiple major producing nations has shifted market sentiment firmly toward tighter global sugar availability through the 2026/27 season.
